Very interesting, David! Apart from the cost synergies that you and Lucy mentioned, Heinz and Kraft could obtain significant revenue synergies. Combining its product portfolio will give them more bargaining power with retailers to obtain larger and better shelf space and promote its products in the stores. Regarding geographical growth, they could leverage their complementary portfolios to obtain a higher presence in international markets. I wonder if they can also leverage their size to have higher penetration in other distribution channels (e.g. hotels, restaurants, cafés, catering, schools).
This is an interesting business model, Andrew! I would like to tell you about a Spanish player, Depiline, which has also managed to create a standard chain of beauty salons in a largely fragmented market of providers that have an uncertain quality. Unlike MiniLuxe, Depiline doesn’t differentiate itself by offering a “premium” experience to customers, it is known for providing good value for money and convenience. Depiline has managed to offer very competitive prices by obtaining economies of scale: its salons are located in high-traffic areas, there is no need to book a service in advance (it is a first-come, first-served model) and employees are trained to deliver the service as fast as possible in order to maximize turnover. I thought that it was interesting to share this model to see how two companies have responded differently to a similar market situation and a similar unfulfilled customer need.
Very interesting post, Grace! I think that the fact that Nordstrom is growing in the digital world provides a great opportunity but also a great challenge in terms of both the business and the operational model. As you mention in the post, Nordstrom has created an operating model that supports its key value proposition: unrivaled service for customers. Now that they are investing in online sales, they are going to have to find a way to deliver this characteristic exceptional service with no physical interaction with the customer. Its operational model will also have to adapt in order to fulfill customer expectations (such as range availability, speed of delivery or online returns policies) while maintaining high profitability.